Plenty of biofuels legislation coming to a town near you in 2023
The UDB Database
The first major development to come our way will be the long-awaited launch of the Union Database for Biofuels (UDB), originally proposed in the 2018 Renewable Energy Directive (REDII), which will become fully operational, that is with all supply chain transactions being recorded into the system, in March.
Fuel suppliers, biofuels producers, feedstock collectors, traders, auditors, certification schemes and several other third parties will be affected by this new system. By tracking all biofuels’ feedstock transactions from their point of origin anywhere in the globe and recording their sustainability information the UDB will bring an unprecedented level of transparency to the industry at large.
Feedstock expansion in the final REDII Annex IX Revision
In December 2022, the Commission unveiled a final draft of the Delegated Directive on the revision of Annex IX of the REDII putting forward a potentially revolutionary expansion of the eligible feedstocks for the production of advanced and waste-based biofuels to decarbonise the EU transport sector.
Final adoption of the revised list is highly likely to arrive at any time during the first half of the year, followed by an 18-month transposition period for member states to amend their own national lists.
The introduction of as many as 17 additional sustainable feedstocks is a much-welcome development, given the EU’s increasingly ambitious 2030 transport decarbonisation targets in the road, marine and aviation sectors.
The most prominent proposed feedstocks for biodiesel production are damaged and cover crops, with the latter most likely including the promising camelina and carinata crops with adequate conditionality ensuring that no additional land is used.
Having said that, the revision also poses significant questions that will require the EU attention. Measures ensuring the protection of existing investments in part A feedstocks processing is one of them. So is the further incentivisation of pre-existing feedstocks in part B of the Annex.
The EU approach to co-processing
Following a consultation held in mid-2022, the European Commission is set to adopt a final delegated act on the EU approach to co-processing possibly during Q1 this year. Taking into consideration the final draft shared by the Commission it is widely expected that 14c carbon testing will be the cornerstone of the system, ensuring that only the biogenic fraction of feedstocks processed in refineries are taken into consideration for the purposes of counting toward the different renewable energy targets. A move that will further enhance transparency and sustainability in the biofuels sector.
Fit for 55 proposals
The current rotating Swedish Presidency of the Council of the EU has stated its intention to finalise negotiations on all remaining pieces of legislation within the Fit for 55 package before its term ends on 30 June 2023 (with the exception of the Energy Taxation Directive, which requires unanimity in the Council and in consequence will most certainly take longer to approve).
REDIII – The revision of the REDII will bring more ambitious supply-side measures to promote sustainable biofuels in the EU Transport sector.
We expect that EU negotiators come up with a solid final deal, which does allow for member states to continue using energy of volumetric targets to achieve transport decarbonisation, in addition to GHG reduction systems such as the one used by Germany.
In this context we expect double counting for the whole Annex IX to continue being allowed in member states, together with the termination of the artificial limitation to the contribution of Annex IX part B feedstocks, less reasonable than ever with the UDB in place and a significant addition of new feedstocks to the annex, as outlined above.
The REDIII revision will also set the basis for the rollout of higher B10 blends across the EU, a long-lasting industry demand. The adoption of the final REDIII deal will be followed by an 18-month transposition period, but judging by the lengthy REDII experience, we can expect a good number of member states to drag their feet and significantly delay the adoption of their national implementing legislation well into 2025 and possibly beyond.
ReFuelEU aviation and FuelEU maritime regulations – the two major laws promoting the use of renewable fuels in the aviation and maritime sectors will also be adopted before the summer, with a date of applicability set in January 2025.
Our association expects that the final deals will be drafted in a way that allows for a fair use of waste lipids in Annex IX in the three transport sectors, road (including heavy duty vehicles), maritime, and aviation, without prioritisation or indeed cannibalisation of feedstocks with more efficient uses in other sectors.
CO2 standard for HDVs
A proposal on the revision of CO2 standards for heavy duty vehicles (HDVs) is expected in mid-February. The big open question here is whether the Commission will leave a role for low carbon and liquid fuels to decarbonise HDVs or instead adopt the same strict approach it took for light vehicles, that is setting a clear phase out date after which only electromobility is allowed for new vehicles (possibly 2040 for HDVs).
Our industry expects that recent leaks rejecting the inclusion of renewable fuels are duly amended and a mechanism to take them into account, such a crediting system, is included in the final legislative draft.
That would leave room for the huge decarbonisation potential of waste-based and advanced biodiesel to continue playing a key role in significantly lowering the carbon intensity of HDVs.
Greening corporate fleets initiative
In the third quarter of the year the Commission is set to propose an initiative to reduce the carbon footprint of commercial vehicles. Our industry expects that this initiative will be legally binding and draw upon the extensive experience of our industry in significantly lower the carbon footprint of commercial fleets with higher blends, up to 100%, of sustainable waste-based and advanced biodiesel.
As the year comes to an end, we will see the most diligent officials in national capitals starting to consider how to transpose the REDIII into national legislation. We will be there to remind them of the new possibility to have B10 rolled out in their national market.
For more information: Visit: ewaba.eu